Demographics Shift, and Some Firms Shift Tactics

Somewhere along the line, the term underbanked became oversimplified. The prevailing definition has been: consumers who don't fully participate in mainstream financial services, who may have a checking or savings account with a traditional bank and little else. But the connotation has inevitably been: lower-income individuals who live paycheck to paycheck and are too poor to afford or even need sophisticated financial services. Traditional banks have shut them out, focusing instead on middle-class and affluent consumers. But experts say some of the underbanked's vital statistics — age, income, education — have changed dramatically in the past few years. "You'd be surprised who's in that mix," said Philip Philliou, a payments industry consultant and managing director with Philliou Selwanes Partners LLC in New York. "This is oftentimes middle America, average income of $50,000, employed." Posted in: Check Fraud